Suppose the price of capital and labor remain constant but that ...

[APUS57]

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm
 
  A) to adopt a more capital-intensive production technology.
  B) to keep its output and production technology unchanged, but to use fewer units of labor.
  C) to adopt a more labor-intensive technology.
  D) to use only labor to produce the product.

Question 2

Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves. This suggests that the microwave industry is a decreasing-cost industry.
 
  Indicate whether the statement is true or false

[Beatricemm]

Answer to Question 1

C

Answer to Question 2

TRUE